Wednesday, January 04, 2006
Strathmore finds a tiny bit of extra uranium...
This press release says they've upped the estimate at Church Rock to 11.8 million pound from 6 million pounds. I figure they have at least 100 million pounds of uranium ore. This adds perhaps 6% to the total. The market went up 7.33%, which I guess is rational after all (if they find a little bit more here, it seems likely they'll find more somewhere else)... except for the fact that each share represents well over 1 pound of uranium in the ground, it probably costs about $25 to extract each pound of uranium, the prices are now above $36/pound, but the stock is only selling for about US$1.75. The market should have gone wild when prices were down around US$1.00 per share.
It seems to me that there are some massive issues going on inside the company that are probably not very visible to outsiders.
I noticed EMC because it is mentioned in the same paragraph as Strathmore here:
...by an asset manager with a large position in Strathmore itself.
If "pounds of uranium per share" is our primary metric for this sort of play, EMC does seem to have a fairly sizable collection of already-explored and already-mined properties. I am thinking about diving in to make a conservative estimate, and I was kind of hoping you had already taken a peek and rejected it :-).